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PI OriginalMicah MaidenbergTuesday October 12th, 2010, 3:14pm

Fixing Daley's Broken Budget Process (VIDEO)

Tomorrow, Chicago Mayor Richard Daley will give the final budget address of his long career, detailing precisely how he proposes closing a gaping $655 million shortfall in the city's main fund. With Daley on the way out, are aldermen ready to contribute more to drafting the city's annual spending plan?

In late March, New York City's Independent Budget Office released a 61-page analysis
(PDF) of the Bloomberg administration's preliminary operational budget
for Gotham's 2011 fiscal year. The document includes the IBO's own
revenue and spending projections and economic forecasts. It accounts for
up-in-the-air state and federal appropriations that could
affect city government's fiscal situation. In plain language, the IBO
analysis detailed exactly where the Bloomberg administration is
spending, taxing, and cutting.

The release of the IBO's paper is just one step in what the organization describes
(PDF) as a nine-month process that starts each September when N.Y.C.'s
community boards hold meetings about city taxing and spending and ends
in June when city councilors representing the five boroughs take a final
vote on the budget ahead of the government's new spending year. In
between are a number of opportunities for residents, city council
members, and budget experts to look at the numbers and consider what's on
the table.

New York's budget office even releases a companion report
(PDF) detailing options the city has to alter its fiscal situation.
This year, they included 35 ways New York could save money (mostly through
cuts) and 28 ways it could raise additional revenues. Those possibilities are published in a simple, one-page format that includes arguments for and against each choice.

The City of Chicago's annual budget process, as the Daley administration has developed it, is a bit different.

Structural reasons explain some of the points of departure between the two cities. In N.Y.C., parks and schools are directly under the city's
purview; here, the Chicago Park District and Board of Education -- while controlled by the mayor -- arrange their own distinct annual budget processes.

But there are other differences, too. For starters, Chicago's budget
process is roughly six months long. The cycle starts when the mayor's
preliminary budget projections
are released to the public no later than July 31 and ends no later than
December 31. (Chicago's government operates on a calendar year, meaning
the annual budget ordinance must be ready to go into effect by January 1.)

Three
public meetings about the budget are held ahead of the mayor's mid-October
budget address to City Council; this year's address, where Daley will discuss how he proposes to close the current deficit of $655 million, is scheduled for tomorrow, October 12. Shortly after the address, council
members will generally participate in a few hearings convened by the
council's Budget Committee about how the mayor proposes spending
taxpayer money. Ald. Joe Moore (49th Ward) told Progress Illinois there are usually no more than two-and-half weeks of hearings.
"It really is not a great amount of time to focus on the budget or go
through it," he said. While not a perfect proxy for mayoral allegiance, 15 of the 35 members of the Budget Committee -- 43 percent -- were appointed to their seats by the mayor. One of those members, staunch Daley supporter Ald. Carrie Austin (34th Ward), serves as the chair.

All the data in the mayor's budget comes from the executive
branch, and there are questions about the value of that information. Ald. Robert Fioretti (2nd Ward), who's running for mayor, wrote a letter to Daley recently requesting actual figures for city revenue collection and spending thus far in 2010 and not merely projected data, as has been the case in recent years. “Projected figures are ambiguous and not real. Ambiguous figures force aldermen to guess if the mayor’s projections are overly conservative or wildly optimistic,” Fioretti said in a press statement.

While the
press, various labor organizations, community advocates, and budget groups like the Civic Federation try to keep tabs on the flow of city money, a buget office might help drill down to the fiscal nitty-gritty. For now, some city council members say they're largely on their own when it comes to budget analysis, though outside groups provide support. Their own staffers rarely have the time or expertise to provide a detailed take on the spending and taxing plan of a multi-billion dollar municipal bureaucracy, according to aldermen. Moore, for example, said his aides devote the entirety of their work hours to constituent services.

At least on paper, it seems clear that New York City's budget
process is more robust that Chicago's: the document takes longer to
articulate, there are more points of entry for residents and elected
officials to weigh in on it, and the Independent Budget Office provides useful
analysis and data-crunching outside of the mayor's office.

This is not to say there aren't problems with how New York does
things, or that N.Y.C. faces no fiscal challenges simply because it
offers a better process. (Quite the contrary, as a matter of fact.)

But
with the twilight of the Daley administration at hand, some local pols are talking once again about changing the budget process to allow for more deliberation, to safeguard against the worst consequences of Daley's budgets, and to examine the city's priorities in a era of recession-hammered municipal budgets. The candidates seeking the open
mayoral seat could certainly signal a new way of doing things in City
Hall by detailing how their administrations would break from Daley's budget approach.

How could the process be improved? In recent years,
two of the main reform thrusts have focused on time and independent
analysis.

The time issue cropped up last summer, when Ald. Pat Dowell (3rd Ward) introduced a bill
that would require the mayoral administration to provide the
City Council with a proposed budget at least four weeks prior to the the
first scheduled hearing. Presently, the hearings start quickly after aldermanic briefings (where the budget is described in what Dowell called "broad strokes") and the mayor's budget address, after which the some data becomes available.

Dowell's bill is presently stalled but she still believes it has merit. "I think it's important for the elected officials to really get an opportunity to review the budget in a timely fashion so we can really look at the details at what's in it and how we might recommend to change it," she said in an interview earlier today.

Finding the resources to get well-qualified, independent analysts to pour over
the executive branch's numbers, assumptions, contracts, and spending has
proven unsuccessful thus far, and could be limited by the city's fiscal constraints.

In the spring of 2009, Moore pushed the idea of increasing resources
for the city's inspector general to allow that office to carry out
more audits of city departments, data that would obviously be useful
during budget seasons. Previously, members of the loose-knit
Independent Caucus had discussed
paying for an analyst to go over the Daley administration's figures,
but the idea never came to fruition. More recently, Tribune columnist
John Kass reported that Ald. Scott Waguespack (32nd Ward) will introduce
legislation to create an independent budget office; he has already offered a bill that would task the council's Finance Committee with reviewing all city contracts worth more than $500,000. Progress Illinois
couldn't reach Waguespack prior to the deadline for this story.

While having a budget office in place during the Daley years certainly
would have been useful, it's an issue the next administration and
City Council, rather than the current executive and legislators, will have to consider; with this year's budget process and the 2011 mayoral
campaign under way, there's no time for a major
change in policy. Aldermen will wade into the budget fray under the usual circumstances, Fioretti's recent request for additional information from the mayor's office notwithstanding.

The efficacy of creating a legislative budget office would surely spark a lively debate at City Hall. Moore said he was leaning toward supporting some kind of N.Y.C.-style budget office. Dowell was sympathetic to the idea, but in the absence of a better economy filling city coffers she said "we need to just have a budget office that works more collegially with legislators."

The next City Council is thought to be interested
in expanding its power after years of working largely under Daley's
thumb. "[The city] needs a new influx of ideas and policies," Ald. Waguespack told Fox Chicago last year. "The old way of doing things no longer
works." Watch it:

It remains to be seen whether or not budget reform is an issue these emboldened aldermen -- and the next mayor -- will champion.